The problem with cobranded cards...

[thelethargicage]

In light of the recent breakup between Amex and Costco in Canada, and the possibility that they might go their separate ways in the US as well, I started thinking of ways cardholders would be affected.

I for one do not want another CO card (if CO wins the Costco bid) because I'm afraid they wouldn't honor the backdating and might even CLD.

I also realized that half of my CCs are cobranded and that the reward structure could change at any moment, especially if the catalog is sold to another issuer. I mean, the Sallie Mae card used to be a 2% card issued by BofA.

[chalupaman]

I think I've had a lot of success with cobranded cards before. Two of my highest limit cards are cobranded and I never really thought about what would happen if something like the Amex Gold Delta Skymiles card were to be sold off to Wells Fargo or some other lender that's much much stricter on CLs, CLIs and rewards. Just look at what happened to that Dillards Amex card people were talking about on here. I think this is why eventually I might want to invest in getting a Chase Freedom, as much as I've tried like two times this year to get it, next year just in case maybe Chase decides to go crazy and sell off to SW and AARP card brands off. 

[Burned2manybridgesB4]

Costco business model would most definitely suffer, since crap one isn't typical to a Costco consumer's purchase level spending. Especially the auto, and travel portions.

[Goblin]

Thanks for bringing that up. It's something to think about.

[Imperfectfuture]

Amex is PROBABLY not gonna lose the bidding war. However, a recent chat with US rep says better to have BCE than TE. The store reps are confused, they think the TE card comes with FREE membership, but actually BCE works better in my situation.

Bigger banks may get the inside merchant exchange, so I doubt it's capital one. But AMEX will fight hard to keep the US business. Though inside store, a lot of things take multiple cards already, eye exams, food, etc. Plus the online store takes any card. All this is rather interesting when keeping the inside sales to one bank card.

[LexieCat]

I'm pretty sure that ANY credit card issuer can change the terms and conditions pretty much as they like.  You always have the option to decline them and close the card, still paying off the balance on the orginal terms.

It's happened to me a couple of times whare I flat-out didn't care for the new terms and closed the account.  Not that big a deal.

[takeshi74]

You could view this as a problem but it's not a frequent occurence.  I personally wouldn't fret over it.  It's not just cobranding that runs the risk of change.

[SunriseEarth]

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@thelethargicage wrote:
In light of the recent breakup between Amex and Costco in Canada, and the possibility that they might go their separate ways in the US as well, I started thinking of ways cardholders would be affected.

I for one do not want another CO card (if CO wins the Costco bid) because I'm afraid they wouldn't honor the backdating and might even CLD.

I also realized that half of my CCs are cobranded and that the reward structure could change at any moment, especially if the catalog is sold to another issuer. I mean, the Sallie Mae card used to be a 2% card issued by BofA.

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If AMEX and Costco were to part ways here, I think AMEX would retain the portfolio.   Ever notice how all of the TE cobranding markers are on the back of the CC?   Change the back of the CC and this could easily be any AMEX product.  But in my ideal world, AMEX will offer an even better TE to retain Costco's business.   There are many things that could happen, and it's probably too early to fret over it now.    

[Anonymous]

Any credit card runs the risk of change and its always up to the issuer. I would agree that this isnt an exclusive co-brand problem.

[SunriseEarth]

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@Anonymous wrote:

Any credit card runs the risk of change and its always up to the issuer. I would agree that this isnt an exclusive co-brand problem.

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Agreed.   Many porfolios have been acquired by other CCCs in recent years.  Some have been independent private-label cards like Target or Barney's (now under TD Bank and Comenity, respectively), but some have been large portfolios, like HSBC's being sold to Cap One.